Company will be REIT ready by March 2022: AK Tyagi, whole time director, DLF

NEW DELHI: Realty developer DLF will make its rental yielding commercial assets ready for a REIT (Real Estate Investment Trust) ready by March 2022, a top company executive said.

Ashok Kumar Tyagi, whole time director, DLF ltd said that the company will appoint an advisor soon and will be REIT ready in the next 12-15 months.

“The decision on listing will be taken by both the stakeholders —DLF and GIC—when we are ready. The money generated will be used to retire debt, which currently stands at Rs 19,500 crore,” Tyagi told ET.

Close to 38 mn sq ft of rental yielding assets (33.8 msf operational and 4 msf under construction) of DLF Cyber City Developers Ltd (DCCDL), a joint venture between DLF and Singapore’s sovereign wealth fund GIC, will be put under REIT.

“We have sort of started the entire process of getting Cyber City REIT ready. We are right now at the stage when we should, hopefully, within this quarter, appoint the initial advisers. The actual timeline of the REIT, will depend on the two shareholders,” Tyagi had said during the investors call.

The real estate major is working out an optimum asset mix to package into the REIT.

“One thing that we need to work along with the consultants to understand will be the entire ratio of development versus rent-earning assets because there’s an 80-20 ratio that SEBI has put in. Also, we need to see what is the most efficient and optimum stream of income that the REIT would eventually have to its unit holders,” Tyagi said.

The company had said that the rental business continued to exhibit resilience and Q-o-Q growth recorded with retail business witnessing gradual recovery after the lockdown.

DLF said that the office business remains stable and continues to exhibit strong collections of 98% + levels. Cyber Park, a 2.5 msf commercial development in Gurugram, commenced operations from August.

“REIT clearly allows the platform to grow, both organically and inorganically. It creates a structure and a mechanism for transfer of other rental assets in future once developed into the REIT within the dealer platform. And we also look at go about acquiring other rental assets in the market,” Tyagi had said during the investors call.

In the middle of Pandemic, Mindspace Business Parks had launched the REIT to raise Rs 4,500 crore. This was backed by K Raheja and Blackstone. Brookfield is also in the process of launching a REIT with an issue size of over Rs 4000 crore, which would be the third REIT of the country. Country’s first REIT was listed in April 2019 by Embassy group and Blackstone backed Embassy Office Parks.